Workers’ comp shift hits towns

October 10, 2012

MAYVILLE - Most towns in Chautauqua County may be forced to override the 2 percent tax cap next year due to a change in workers' compensation charges.

Billing the towns rather than doing a chargeback will most likely cause 2013 town budgets to increase, according to Susan Marsh, county finance director.

Marsh said the county eliminated chargebacks of workers' compensation after a state audit showed $69,000 in tax cap overrides. Because chargebacks were not included as part of its tax levy calculations, the county went over its limit.

As a result, towns now will be billed directly from the county, as is the current practice for villages and cities. In turn, towns will increase their tax levy to make up the difference.

"Instead of a town getting a bill each year, we would give them a chargeback," Marsh said. "All the municipalities will now get billed. We're going to bill everyone so it's all even."

The shift in costs will likely force towns to exceed their 2 percent tax cap next year. That doesn't necessarily mean taxes will go up, however. As the towns tax levy's increase, the county's will decrease proportionately.

"Towns will probably need to override their tax cap for this one-time increase," Marsh said. "It doesn't mean someone's taxes are going to go up, it just means the cost goes from one line to another.

"Instead of taxpayers paying for worker's compensation as a chargeback on their real property bill, they will pay to the towns. If a town increase its taxes along with the worker's compensation cost, then taxes will overall go up."

The Chautauqua Town Board already has voted to override its tax cap due to the shift in costs.

"Our (2013) budget is blown. That's it in a nutshell," said Don Emhardt, Chautauqua town supervisor, at a recent public hearing.

Emhardt said the town, which isn't projected to increase local spending, is expecting its tax burden to inflate by $140,000 next year.

Other towns, such as Ellicott, are still in the process of determining the best course of action to handle the new shift in responsibility to the towns of Chautauqua County.

According to Cecil Miller, town supervisor for Ellicott, the town will likely approve a resolution to set up a public hearing to override the 2 percent tax cap at its next meeting on Oct. 1. If the resolution is passed, the public hearing to override the 2 percent tax cap will be set for Oct. 15.

"I can't say enough that this will likely not result in an additional expense for the taxpayer," said Miller. "This is simply different accounting in the town's tax budget. That is the important aspect to understand."